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re: another trading halt... ASX Announcement17thNovember 2004Proposed Sale of Assets The Directors advise that Lion has contracted to sell two subsidiary companies that
respectively hold Lion's interest in the Bula oil production tenement in Indonesia, a
drilling rig and other heavy equipment used in Indonesia. Lion will retain its
significant investment in the Oseil oil and gas tenement in Indonesia and its 10.63%
shareholding in Entek Energy Limited.

Lion expects sale proceeds and loan repayments totalling over $5,720,000
(US$4,350,000) plus proceeds from the sale of oil inventory held to the date of sale
totalling approximately $1,480,000 (US$1,100,000) an amount net of Indonesian
Government entitlements at completion in mid to late January 2005.

The purchaser is PT Ilham Treda Industri (or nominee acceptable to Lion), an entity
at arm's length to Lion. The sale is of the shares in Indonesia Prima Energy Services
Limited (a company that in turn holds all the shares in PT Prima Jasa Energi that
owns and operates a drilling rig and heavy equipment in Indonesia) and of the shares
in Kalrez Petroleum (Seram) Limited (a company that owns a 100% interest in the
Bula oil and gas tenement).

Kalrez Petroleum (Seram) Limited also owns a 2.5% interest in the Oseil oil and gas
tenement, which asset will be freely transferred out to another Lion subsidiary before
completion.

The sale is subject to fulfilment of these conditions by 7 January 2005 (or as may be
agreed or waived):

(a) Lion shareholders approving the sale under ASX Listing Rule 11.2 at a
meeting expected to be held in early January 2005. (b) The 2.5% interest in the Oseil tenement being freely transferred out to
another Lion subsidiary. (c) Indonesian government consents to the transfer out of the Oseil tenement,
and to the transfer of the shares in the subsidiaries being sold. (d) An entity holding a share in one of the subsidiaries on trust transferring
that share as directed by the beneficiary. Lion expects to apply nearly the whole cash proceeds (net of transaction costs) in
acquiring (by purchase or farm-in) oil or gas tenements in the proximate future as
opportunities arise. Lion does not intend to pay a dividend, or return of capital, as a
result of this sale. Lion Energy Limited (ACN 000 753 640) Suite 33, 168 Melbourne Street, North Adelaide SA 5006 Tel: (08) 8239 2666 Fax: (08) 8239 1744 Email: [email protected] Energy Limited (ACN 000 753 640) Suite 33, 168 Melbourne Street, North Adelaide SA 5006 Tel: (08) 8239 2666 Fax: (08) 8239 1744 Email: [email protected]
As shown in our 2004 Annual Report, Lion had on 30 June 2004 these asset groups:

1. 100% interest in Bula Petroleum Sharing Contract, drilling rig and heavy
equipment. These are the assets Lion proposes to sell. Historical cost at end FY 2004:
$2,249,862 Gross profit FY 2004: Oil $ 2,615,850 Rig rentals $ 769,110 2. 2.5% interest in Seram (Non Bula) PSC (Oseil). This asset is to be retained in
the Lion Group. Historical cost at end FY 2004: $7,137,187 Gross profit FY 2004: $ 430,300 (after production costs @ $ 7
p.b.) 3. 12.5% interest in 6 Cooper Basin exploration licences. After 30 June 2004
these assets, valued at total $4,400,000, were spun out to Entek Energy, in
which Lion now holds a 10.63% shareholding. Historical cost at end FY 2004:
$220,000 (10.63% shareholding in
Entek) Gross profit FY 2004: Nil Market valuation 15/11/04:
$1,554,000 (10.63% shareholding in
Entek assuming a market price of $0.37
per share). The 2.5% interest in Oseil is, and remains, Lion's most valuable asset.


Yours faithfully,
Lion Energy Limited


G A Mercorella
Executive Chairman


Note:

This Announcement refers to Australian currency and consistently assumes an exchange rate
of 76 cents Australian currency for one dollar American currency. The proposed sale is in fact
denominated in American currency. For the sake of consistency, historical costs and gross
profit contributions originally in American currency are in this Announcement expressed in
Australian currency. Lion has not hedged the receivables under the proposed sale and is
exposed to any change in the exchange rate between now and completion.